Is it bad for this forum to recommend variable DD payments

Ultrasonic

Marvel1 said:

£485 in credit, company goes bust, new supplier, how long do you wait to be refunded or whatever happens?

Two thoughts:

1. Most are now with the largest suppliers that probably won't be allowed to fail. 
2. Credit balances aren't necessarily an issue when going through the SOLR process but are more likely to be if someone switched away from the SOLR before the transfer is complete (which I deliberately didn't do to avoid such issues). I was with Pure Planet when they went bust and my first bill from Shell took full account of my credit balance with PP when they ceased trading. There was no 'refund' to wait for.

Northern_Wanderer

Ultrasonic said:

@Mstty I broadly share your concerns, and have expressed such when considering advice to those who are most likely to struggle to pay higher bills. Currently I'd say there is a stronger argument than ever for this due to the uncertainty over the price rise in October, meaning even the wisest here can't truly budget for what is to come if on an SVT. The jump in monthly costs for a summer at the current price cap to next winter at whatever the October cap is could be scary, particularly for the elderly who need to heat their homes more of the time and often to higher temperatures than a typical younger family). 

Indeed, and those poor people who have electric heating. But the fact is, the cost is the same, no matter how it is paid for.

I'm just thinking now how to factor in the October price increase for my budgeting plan now. Should I put an extra 25% into my pot? Then when next winter comes the pain will be less?

Ultrasonic

Northern_Wanderer said:

Ultrasonic said:

@Mstty I broadly share your concerns, and have expressed such when considering advice to those who are most likely to struggle to pay higher bills. Currently I'd say there is a stronger argument than ever for this due to the uncertainty over the price rise in October, meaning even the wisest here can't truly budget for what is to come if on an SVT. The jump in monthly costs for a summer at the current price cap to next winter at whatever the October cap is could be scary, particularly for the elderly who need to heat their homes more of the time and often to higher temperatures than a typical younger family). 

Indeed, and those poor people who have electric heating. But the fact is, the cost is the same, no matter how it is paid for.

Nobody is disputing that. The issue here is one of budgeting.

molerat

Looking at various posts on these forums I fear the vast majority are incapable of budgeting for monthly variable, to many budgeting means having not much less than £0 in the bank at the end of the month. So for them monthly budget DD is the only safe way to go but suppliers should be forced  into providing monthly statements of account.  I am not against it, it can work for us minority of sensible budgeters, but actively trying to promote it as the best way is a bit reckless.

Northern_Wanderer

molerat said:

Looking at the posts on here I fear the vast majority are incapable of budgeting for monthly variable, to them budgeting is having not much less than £0 in the bank at the end of the month. So for them monthly budget DD is the only safe way to go but suppliers should be forced  into providing monthly statements of account.

I was actually just thinking that if I had monthly billing on a fixed DD I might be more inclined to stick to that for gas, at least I would know where I stand, as I always did on Zog. I am with EDF now and it's 6 monthly billing on fixed DD which bugs me. And I think 6 monthly billing will get some people in debt.

london21

Think most people also do not understand that the DD is not fixed, because as rates have increased the amount will also reflect. It will go up and down based on usage also. 

molerat

london21 said:

Think most people also do not understand that the DD is not fixed, because as rates have increased the amount will also reflect. It will go up and down based on usage also. 

Fixed for you

london21

molerat said:

london21 said:

Think most people also do not understand that the DD is not fixed, because as rates have increased the amount will also reflect. It will go up and down based on usage also. 

Fixed for you

I am with Bulb, It's variable.

Well will be fixed if one is on a fixed rate deal. 

[Deleted User]

I don't know what my EAC is going to be where I live because I've only been here since end of August 2021.  However judging by the records I have kept, I have a fairly good idea where my EAC is going to be come October 2022 (when my current fixed rate runs out AND the next round of price rises happens with the cap).  Certainly I have a much better idea of where it is likely to be than Eon Next have suggested.  So going to variable DD only works for me because I fortunate I can squirrel funds for next winter - so far an additional £650 has gone into premium bonds and I want to be up to be at least £1500 if I can before next winter.  Not everyone will have the means of doing this.  I have been burned by 3 SOLR's although got my money back in all instances.

I don't think it is wrong to point out the option of Variable DD to those that are fortunate to be able to do this.  It had never occured to me to do this until fairly recently when Eon Next wanted to increase the DD amounts.  I want life to be simpler and have control over what I spend my money on (and when I spend it).   

Northern_Wanderer

If I'm referring to a fixed DD, I do mean that I have worked out my annual usage and am paying that total divided by 12, just for clarity. Perhaps I should call it a budget account as they used to refer to them as that, but obvs you are always either in credit or debit. I can see that a lot of people think they should only be paying £?? and use whatever they like with no consequences to the monthly amount it seems.